When I took the introductory fine arts course in college (which actually was a tough course), one of the ideas that stuck with me was devolution. The instructors used that word in a very particular way, to apply to the changes that took place in late Roman art. Drill technology improved to the point where drills could be used to help create sculpture: they were faster and cheaper to use than chisels and hammers. But the results were cruder. It was easy to identify a late Roman bust: the curls and eyes were much coarser than in earlier Roman or Greek work.

Now it’s probable that drills, by making it cheaper to produce sculpture, allowed for more sculpture to be made. But I never heard that mentioned in that long-ago course, so I’m not sure. And I didn’t hear of a two tier market, with the more labor intensive, more finely crafted work being produced for a more discerning clientele, and the drill work being more of a mass product. The impression I had was that the new drill technology became a new normal, replacing the older methods.

It’s become fashionable to discuss the creeping decay in advanced economies, particularly the US, both in term of third worldification and end of empire. The more apocalyptic turn to theories of collapse from writers like Jared Diamond and Jacques Tainter. But I think they miss one aspect that may prove to be important, that of how the pursuit of efficiency doesn’t always produce net gains, as economic theory might tell us. The measure of productivity, more stuff per unit input, misses how service/product quality can deteriorate. Some of this is deliberate: I have readers in comments regularly lament how old durable goods and tools were more reliable and lasted longer than contemporary versions. But there are other aspects of the downside of the willy-nilly pursuit of efficiency that have become so routine we accept these indignities and often don’t recognize them (unlike other ones that remain annoying years after the change, such as the widespread implementation of call routing and prompts in place of humans answering phones).

Let’s look at banking. The public has become desensitized to the fact that banks do something that is still rather amazing: they handle a ginormous volume of transactions, and they give you a report, every month, of what happened to you. And they were able to do this in the bad old days, when computers were mainframes, a lot of banking work was done on adding machines (when I started on Wall Street in the 1980s, I did spreadsheets on green ledger paper with a calculator, copying information from hard copies of SEC filings), and you got your paper checks back with your bank statement. You really need to sit back and think on what a computational and logistical challenge it was. And this worked, transaction processing was highly reliable.

The first wave of technology implementation was led by people who were sufficiently concerned about maintaining old service standards that my impression is that the service change was a net gain. Citibank’s computerization of its check processing was a singular success and set John Reed on the path to becoming Citi’s CEO. But in the last year, I’ve experienced and/or heard of things that would have been seen as serious failings of transaction processing, and the number is so large that I no longer think this is just random, I think it’s a sign of a bad nexus of more complex technology installations (remember, new tech in banking for the most part is bolted onto existing infrastructure) combined with ongoing cost cutting and underinvestment (which is a long-lived managerial fad; remember this is taking place in an industry which loves to cavil about profit problems but whose survival risks come from risky wagers, not retail banking margins). And we will put aside the horrorshow of mortgage servicing, we’ll stick with bread and butter processing.

I used to do a lot of international wire transfers when I lived in Australia in the early 2000s. I never never had a problem. By contrast, I’ve had a 50% fail rate with them in the last two years, despite having no errors in the information provided. And in one of the fails this year was to someone who’d been sent a wire successfully from the same account at my bank to the same recipient at another bank. And to add insult to injury, despite being required to provide all sorts of info about each of us, including phone numbers, no one tried calling either of us even though the wire was hung up for five days. And I was charged by the recipient bank for their inability to find their own customer.

I also a check to a cat sitter mistakenly get in the envelope to my health insurer. Not only did the health insurer deposit the check, my bank honored it. By contrast, the bank I used in the 1990s would call me at least once every six weeks about checks presented to them for payment. My signature wouldn’t look enough like the one they had on file and they wanted to make sure I really had signed it.

Oh, and I had some ambiguous branch charges on my business account. I had a guess as to what they were but I need real explanation for my taxes, not guesses. It was like pulling teeth to get documentation from the bank. I find this particularly alarming given another innovation: that you can now deposit a check using your smart phone. Scan the front, endorse and scan the back, and voila! All done. I had American Express as a client in the 1990s and 2000s, and Amex spend a small fortune keeping abreast of forgery technology, frequently updating the sort of paper and printing it used to beat counterfeiters. Scanning an image rather than even taking an actual check so a somewhat trained human can at least give it a once over? This seems to be an invitation to fraud, and the banks finding a way to cover those losses with other customer fees.

When I mentioned my wire gripe to a friend, a much worse story came to light. A friend of theirs needed to overpay a Citibank business card at year end (I am mentioning the name of the guilty banks because the unhappy customer wants the perps embarrassed; I have also double checked the details of this account) because some payments he had authorized weren’t going to post (shaggy dog story details will be omitted), and he wanted them to take place fro tax purposes in 2012. Overpaying would solve that problem (as in what mattered was the money getting into Citi’s hands by year end). But Citi won’t let you do that on line; the only way is by sending a check or wie transfer.

He sent a check overnight to the address on the website for overnight payment after verifying with a rep that that was the address to use (they also showed a PO Box, and he was going to use overnight mail, but was told to use a different address instead). He is doing end of year transactions on his bank account and sees the check has not cleared, which does not surprise him (the address was out of state) but figured he’d look at his account at Citi. No indication that the check got there. Not sure if this was unusual, he decides to call to see when the payment will appear. The rep tells him it should have been posted, and takes his routing and account number to see if any such payment is pending. No dice.

The now concerned businessman asks how this could have happened. The rep asks where he sent the check. He reads the overnight payment address from the Citicard website. The rep says they don’t accept payments at that address. The customer asks what will happen to his check (if Citi will eventually process it, all will be OK because he can prove they had it by year end). He says they will either process it or return it.

The fact that the rep has no idea what will happen is a big problem. The poor sap isn’t sure about sending another check to the right overnight address (there was still time to do that) so he decides to go to his bank, TD Bank, which is open late, to send a wire and stop the check that is floating around.

TD asks for wire instructions, which he has. But TD wants a recipient bank branch address, and Citi (on the phone with super harried customer) says this is unnecessary, they’ve never heard of such a thing. TD Bank rep says the wire can’t be processed without an address. The Citi rep gives an address and makes clear this address is pretty arbitrary. The poor customer is worried as to whether the wire will be credited properly. He can see another mess coming.

Next day, customer gets an e-mail from his accountant, and the implication is he could still send a check, he has one last chance today. Customer does not like sending a check but is even more worried about the wire, and so goes back to the branch to see if the wire can be stopped (it could not go out until Monday and this is Saturday).

Much consternation ensues. The people in the branch look in all the electronic registers where the wire should be. Not in the wire log. Not in the wire queue for pending branch approval. Not in the queue for pending regional approval. A wire initiated after Friday evening should be in the wire log and locatable in the branch system. They call the back office, and the back office looks in places the branch can’t access and see no evidence of the wire either.

The branch staff tells the customer he is perversely lucky, it looks like somehow that the wire he didn’t want to go isn’t going anyhow. But just in case it somehow got to the wire room, which they think is impossible, they send a stern message to the wire room not to send the wire and also make sure the people who open up the branch on Monday will call the wire room to make double sure the wire isn’t sent somehow.

The poor guy goes to Fedex to send a check overnight.

Monday morning, he gets a call from the branch. The wire went through. Oh, and by now, he can see the first check he sent was processed by Citi and was posted to the account.

So get this: the poor sap had tons of stress, wasted tons of time, paid two stopped check fees to his bank, two overnight fees, and one wire fee. Citi at least agreed to waive its bounced check fee for the check sent to the incorrect address on its website. And this reveals a moderate competence fail on the part of Cit and a major one by TD Bank, which gets top customer service ratings from JD Powers.

It may seem as if I’m making a big deal over a series of transactions, but you need to understand the importance of payment systems to get the significance. Bank employees should understand how their systems work, since systems mow are much of what banking is about. And banks have long been designed to give high priority to achieving accuracy in payments processing. The kinds of failings I’ve seen in bank payment processing is like seeing the power dim in an electrical system when it’s not at peak load. These are signs that corners are being cut, and not just in one place.

And, to come full circle, this trend to devolution may be a driver of collapse. At this point, all I have is anecdote and intuition. But one of the things I found frustrating about Tainter is that he posited that increasing social complexity led to increasing energy demands, and those led to collapse. He also pointed out that sometime the elites in a society succeeded in pulling it out of a dive path, and other times they didn’t. Yet he refused to give social factors any explanatory power in his theory (like, say, rising levels of corruption among the ruling classes).

The reason I’m not sure increasing energy demands are an adequate explanation is that, before modern times, population level were pretty static, as were standards of living. So you would not see the two main drivers of our resource demands as having anywhere near as significant an impact.

But any complex system has a tradeoff between efficiency and robustness. This is something we discussed at length in ECONNED, how economic theory bizarrely assumes stability by assuming that economies have a propensity to equilibrium. That in turn gives them a bias in policy prescriptions to favor more efficiency and not even think about stability. Yes as Richard Bookstaber stressed in his book Demon of Our Own Design, highly efficient systems are prone to catastrophic failures, since disruptive processes propagate through the system too quickly for anyone to stop them. Taleb also argue that robust systems, like biological systems, are inefficient by virtue of having extra capacity (two kidneys, for instance).

Since the early 1990s, some seemingly minor changes in prevailing idea of corporate governance have had disproportionate bad effects. Share-price-linked CEO pay has led to underinvestment and short-termism, which produces more short term profits at the expense of stability and reliability. And if you do that across an entire economy, it isn’t hard to see that this over-optimization has led to much more fragility. We now have extended supply chains and the media has identified potential catastrophic points of failure, such as China having a stranglehold on rare earths. And even absent disaster scenarios, we also have an ongoing, hidden tax of things not working as promised but it being too costly in terms of time and money to get that rectified (I’ll spare you examples outside banking and health insurance, but overpromising and underperforming appears to be another new normal).

While extreme outcomes make for better stories, it may be that the US (and perhaps other advanced economies) go through a period of whimpers rather than bangs, of a grinding fall in competence that consumers accept because it’s just too hard to demand better. I don’t relish the prospect but I’m also at a loss to suggest remedies.

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157 comments

Good post. You’re onto something sizable, though it may or may not grab folks’ attentions here. You should keep thinking about this stuff and maybe — after a bunch of posts — polish the end result into an article.

You’re right. People conflate innovation with evolution. In my experience, whenever convenience is the primary engine behind innovation – be it a power tool, a dingus, or a service – the quality *always* suffers.

These are all very good points Yves. It seems to me that our government is attempting stability by an oversized Federal workforce (more govt workers responding to any disruption that comes through). An outsized government will ultimately sap all the resources of the private sector and cause collapse just as well as efficient disruptions will.

You can see the government overkill just about everywhere, in the plethora of unneeded laws, to the US military becoming policemen to the world. As I recall, this kind of government burden on producing parts of society is what led to Rome’s downfall. The Roman farmers were taxed so highly they began to not farm some of their land. Then the Senate responded by taxing them on what the land WOULD HAVE produced if they had farmed it. It got so bad that by the time the barbarians invaded, the farmers were literally pointing to the way to Rome so it could be sacked.

This is happening right now with the growing resistance movements, but I think we have yet to hit a critical mass of people disaffected by their government. If the USGovt continues with its paranoia reign of terror, we certainly will hit that critical mass before long.

Can you tell me where you got that information about the taxation of farmers in the Roman Empire? I’ve read a couple of books on the ending of the Empire (my favorite, Peter Heather’s “The Fall of the Roman Empire: A New History of Rome and the Barbarians,” and also “The Fall of Rome and the End of Civilization” by Bryan Ward-Perkins, which also includes evidence of regression in technology after the fall), and that particular point was not mentioned.From what I’ve read the Empire was actually quite efficient in terms of bureascratic manpower. At least the Western Empire; I’m less informed about the Eastern part which continued functioning at least until 1204 C.E. and kept the name until 1453. I would have said the fall of Rome was caused by their failure to stop the Vandals from taking North Africa, which led to the loss of tax revenue, much as the Republicans have done to us over the last thirty years.

Rome’s late imperial tax burden converged with some “extraneous” factors such as the emergence of new threats from the outside(Sassanid Persia, Gothic migrations), partial depopulation due to epidemics in the 2nd and 3rd centuries, and the 3rd century monetary meltdown due to the steady export of silver in return for luxury items. The result: a need for bigger armies and therefore higher taxes just at a point when the mainly agrarian economy was least able to handle the additional tax load.

The Romans had a backdoor tax on the wealthy/redistribution plan until Christianity came along. If you wanted to be a big Roman*, you had to put on a show at the temple. The state owned all the temples/shrines, and the people who participated in the show (masons, artists, whatever) could afford to offer lower rates the rest of the year in exchange for a big pay day on celebration day. By doing this, the treasury was funded, and people were kept out of the labor pool raising wages for who wasn’t in the shows, expanding the tax base for the non-temple taxes.

Christianity screwed this up because the churches didn’t pay the tax, and Rome couldn’t maintain the legions outside of areas of immense commerce and pilgramage (i.e. the area around Constantinople and the parts of the East they held onto.). Money given stayed with the Church which didn’t put on the same show or handed over money beyond maintenance to the state. They hired mercenary forces in the place of legions, who didn’t have the discipline or incentive to fight. The Romans had turned back German hordes in the past. To maintain the legions, the Roman Senate looked for things to tax without taxing themselves who couldn’t reach them (i.e. The Roman small farmer).

The Eastern Empire falls when the Crusaders took over the care/security of pilgrims and the subsequent tolls, depriving the empire of important revenue. With the raid of Constantinople and the subsequent shift of commerce, the Eastern Empire falls.

*Julius Caesar’s family was a big deal because any time they had money they put on a big show.

not sure why we have this focus on the Roman empire but we seem to to that. but note that part of the reason for the fall was a really bad drought had hit the empire. and remember this is a time where 99% of the population work in farming. so feeding the empire was a really big deal. in fact one o fthe early challenges (that was actually met) was that Rome was the lack of water leading to starvation in Rome. the yaddressed with the aquaducts. but if water became scarce later (and it did) in a larger area, then even the aquaducts couldn’t help. and this was a city of millions in a day when most cities would have been large if they had a population of 10,000. with a drought back then you would have had starvation, deeaths, fewer children leading a smaller population. which lead to others being able to challenge the empire and drive it back from where it had spread earlier

Where did you get this drought idea? From what I’ve read the mainstream view is that the Western Empire fell because Rome experienced a centuries-long political crisis in which becoming emperor was usually a death sentence and the state existed solely to maintain high salaries for the army.

Odd that nobody mentions the landed Roman aristocracy’s claims on their tenant farmers’ product, or the way they contributed to their indebtness, in many cases turning them into debt peons. Michael Hudson has written about this – he also observed that Gibbons, like many other British and American historians after him, avoided the issue of debt and its contribution to the fall of the Empire. Also, no mention in the above posts of the crushing economic demands of the enormous clerical apparatus of the Christian church on Roman citizens (peasants would be a better word). Or that by the that time the aristocracy had been largely exempted from paying any tax. Or that the impoverishment and near serf status of the majority of Roman citizens led to a manpower crisis in the legions that was solved to a large degree by relying on conscripts from the Germanic tribes (barbarians). Seems like most modern Anglo classical scholarship is still doing a good job deceiving the US public, who would find it dangerous or too much homework to get through a Marxist work such as Anderson’s “Passages from Antiquity to Feudalism”.

It’s important to note that by the time the Roman Empire was overthrown, the peasants were sick of it. It wasn’t doing any visible good for them any more, so why not let the German warlords take over; hey, it might be an improvement.

This is also how the Soviet Union collapsed. We’re going to see the same thing in the US unless a large populist movement gets organized PDQ.

I’ve often found “efficiency” to be a very slippery word (and idea), which of course makes it perfect for economists. What is “efficient” depends heavily on the context in which that word is used. Is it really less “efficient” to have redundency of key systems (like kidneys) across an entire population if that redundency is an evolutionary response that enables the popluation to survive? Sure, in an individual that is not subject to any stresses, i.e., just looking at an anatomical chart, the second kidney looks like a waste of space and tissues. But that ignores the function of the entire system in real life.

I think this point can be extended to time and cost. Which is more “efficient”, driving to a sales call at 55mph or 65mph? Does it depend on whether the difference in arrival time will mean losing a customer or making additional sales visits in a single day, even if driving faster “wastes” more fuel?

Of course what happens most often is that economists turn to cost accounting when they can’t think of anything else; then “efficiency” becomes a euphemism for “profitable”. And so we find “planned obsolescence” and drilled out statuary, for that maximizes unit profit. If we look at quality, then maybe it’s not so efficient.

“What is “efficient” depends heavily on the context”
devolution is an interesting concept and something I have been thinking about for many years due to my involvement in manufacturing for 30 years and watching the evolution of work move from skilled labor to a capital intensive enterprise. Context is critical for example if farming today modeled itself after the Amish instead of large scale industrial methods our society needless to say would be far different in its attitude about technology and its impact on our daily life.

I’m currently reading Karen Ho’s Liquidated: An Ethnography of Wall Street. The author is an anthropologist who took a break from her graduate studies at Princeton to work at Bankers Trust for a couple of years at the turn of the millennium with the open intention of developing contacts for subsequent research interviews for her thesis. Among other things, she is making the case that it is the exaltation of “shareholder value” that emerged in the investment banking industry over the last several decades that has led to that same notion to be forcibly infused into the rest of publicly held corporate industry. This has led directly to the downsizing, underinvestment and narrow focus on the next quarterly earnings report that results in the decline in efficient performance. I’d never quite made this connection before.

“Efficiency” does have many meanings. This from Bellamy and Brett in their article “The Planetary Emergency,” 12/12, Monthly Review:

Monopoly capitalism demands an ever-faster circulation of commodities in order to increase sales. Durability is the enemy of the system. Maximum profits are thus generated by a throwaway culture. The economic life of cell phones in the Untied States is only a couple of years due to both planned and psychological obsolescence, with the result that 140 million cell phones reached what the Environmental Protection Agency refers to as their “end of life” (EOL) in 2007. Some 250 million computers and peripherals reached their EOL in the same year.54 In 2006 Steve Jobs urged customers to buy an iPod every year to keep up with the latest technology.55 More than 150 billion single-use beverage containers are purchased in the United States every year, while 320 million take-out cups are bought and discarded each day.Since the 1960s, one-time-use containers have risen from 6 percent of packaged soft drinks to 99 percent today. The more than 100 billion pieces of mostly unwanted junk mail delivered to homes and businesses in the United States each year add 51 million tons of greenhouse gases annually.56 In an economy designed to maximize overall waste, products are systematically made so as to no longer be repairable. Consumers are therefore compelled to discard them and return to the market and buy them again.

I have also wondered if this idea of obsolescence and disposability etc has infiltrated our social lives – hey, if someone doesn’t meet our needs, or isn’t the latest model – toss ‘em and get someone who is …

What happens to relationships in a society that doesn’t “fix” anything anymore?

LOL – so glad to see others ruminating on the problem of “efficiency” … I have “wondered aloud” before on what the human body would look like if designed by a corporation – at most, 1 kidney, 1 lung, !/2 liver, much shorter gut, fewer fingers, etc. the rest of that stuff is soooo redundant, what a waste of energy for upkeep ….

I have also raised the idea that “efficiency”, or “productivity” is not something to be pursued for its own sake, but more importantly in the context of precisely what purpose that “efficiency”/”productivity” is serving …. For example, wouldn’t a lot of folks have been much better off if the Nazi death camps had been considerably less “efficient/productive”?

Automation has been foisted upon us in the name of “efficiency/productivity” and we have been taught to consider them the Cardinal Virtues of our new “secular” religion – where The Market as God demands its own pound of flesh … and that “pound of flesh” has multiplied many fold in lost jobs, crafts, etc.

Methinks it goes even further – when we replace our hands and eyes and feet, and yes, even brains, with those of machines, it is not just our “culture” that is devolving, but we ourselves … i don’t see all this stuff as “extensions” of ourselves but replacements for – and all that stuff we hand over to machines is stuff we will “forget” how to do – And maybe that’s OK – maybe “convenience”, for that always seems to be the hook with which they catch us, is worth all the loss – but how much can we lose before we lose ourselves ….

As Sto keeps saying – STM we need to be less “productive”, and I would add less “efficient”, in a whole lot of areas …

Automotive writer Eric Peters on humans devolving as a result of automation :

With the advent of each new human-usurping technology, the human becomes that much less relevant. Homo Consumerus – the sail-fawn gabbling talker, not the old-fashioned doer – is the new man.

Well, so?

That’s what some might say.

But I’d say, what’s the point of living if all our living – our deciding and acting – is done by someone … by something … else? A mannequin – or a corpse – is dressed and posed and positioned by others. It does nothing itself. Can you imagine anything more horrible? To just sit there? To be positioned?

And the mannequin – and the corpse – are at least insensate.

Those over 40 will gnoe what I am saying.

God help us all.

Mastery – learning how to competently do things oneself – is the very essence of worthwhile living. Its antipodal opposite is that which is in the process of becoming – of merely existing. Of which “Lane Keeper” is merely one ugly harbinger among many.

It was said of Jefferson that he could “”calculate an eclipse, survey an estate, tie an artery, plan an edifice, try a case, break a horse, dance a minuet, and play the violin.”

I expect ol’ Tom would have preferred to do his own driving, too……

And which world sounds more appealing? The world of the “Lane Keeper” – in which human beings are inexorably reduced to Dunsels (perhaps Eloi is more apt) merely along for the ride, dependent on intelligences other than their own? Or a world – rapidly receding in the rearview – in which men learn to do things for themselves and thus may be called men?

I also wonder how many folks know how to change a tire anymore – the assumption is “I’ll just get on my cell and call a tow truck …

The other thing I notice is that the presumption of the ubiquity of cell phones means that folks don’t tend to stop anymore when they see someone off the road … “Of course they will just call for help …”

I was on the NY Thruway a couple of months ago and noticed a small fire by the side of the road (probably from a cigarette) – it wasn’t very big, but it was spreading away down toward some larger weeds, so i said what the heck – I pulled over and started to put it out with my feet …. Other folks drove by, and drove by and …. Pretty soon I heard some sirens and some big fire trucks came along – somebody must have called – on their cell phone … By that time I pretty much had it all put out – as i said, it wasn’t very big … The guys in the fire truck asked me what happened and i told ‘em – and one guy said “With your feet?” and i said “Yeah, it wasn’t very big ….” And then they did their thing and finished up. And i thought – “what a shame, what a waste … of course, if it had been a big fire, it would have been a good thing, but then every big fire starts out as a small one …

These days folks are all concerned if they don’t have their cells with them – “what if you get stuck? what if you get lost?” And i say, “well i’ll do the same thing i would have done before cell phones came along” But soon enough folks won’t know what that might be …

I hope fire brigade commended you for your initiative and spirit of public service.

The risk of over-dependence upon technology is a recurring theme of several provocative fictional stories, including William Forstchen’s “One Second After”, Nancy Kress’ “Nano Comes to Clifford Falls”.

And, yeah, Tainter is simplistic. The redundancy/stability trade-off is key, as you say. There are many examples, especially in nature, of enormously complex systems that are composed of unreliable components, which nevertheless perform extremely reliably as a whole.

Obviously, human brains are as complex as anything that exists while individual neurons are incredibly unreliable, and yet — through massive parallelism and redundancy — errors are incorporated and actually inherent in the process of the whole organism’s functioning.

Furthermore, this kind of robustness doesn’t exist exclusively in evolved nature; systems can be designed in this way.

The classic paper that kicked off looking at this is “Probabilistic Logics and the Synthesis of Reliable Organisms from Unreliable Components” by John von Neumann, 1956. But it’s maths heavy and Claude Shannon’s prose account is far easier going —

I think what you’re speaking of is ‘efficiency as specialization’ measured by output, which has been terrible for lots of things. It’s the Ford way of doing things. Agriculture (and, in turn, our health), for example, has really suffered for the efficiency-as-specialization model. It’s a bad model for many reason, not least because it says that specialization is always the way to enhance efficiency/output, and pays little mind to the kind of system it is being applied to. Joel Salatin’s operation at Polyface Farms, for example, is all about efficiency of a different kind, but industrial agriculture would see it as very inefficient because it doesn’t specialize and because it output is understood to have a ceiling.

Maam;
You are providing theoretical underpinnings for a Post Catastrophist Economics, no question. Lots of us have lamented, “Oh where is our Pecorra Commission now?” This post and the others to come, plus associated ones elsewhere will, I suspect, constitute a Shadow Government White Paper for future reformers, and have no doubt, they will of necessity arise.
One aspect that shines clearly through, even at the ‘floor worker’ level, is how the present dynamic assists and abets the Drive Towards Wealth Inequality. Short termism and endemic corner cutting do produce massive excess profits. The magnifying problem is how the excess wealth generated is being sequestered by the .01% for their own benefit. Like the precious metals flows in Late Roman times, much productive potential becomes locked away. Yes, the system is growing in wealth, but said wealth isn’t doing anything productive. That’s where the TARP program went aground; no lending requirements were instituted to pair with the bank bailout funds. The result; we’re now fearfully awaiting the next dip in the New Perpetual Recession Economy.
Time to go to work and finance some more rivets in the CEOs’ latest yacht.

My own experience, with a different large bank. I am free to overpay my credit card at any time online, which will kindly be credited same day. And I’ve always been asked to provide an address when sending wires.

The main problem was poor pilot training. If pilot training was reduced in a quest for “efficiency” then it’s an example. However, I don’t know if that was the cause of the poor training. Do you? (seriously – no snark).

With computers, planes almost fly themselves. Pilot training consequently seems to have suffered, either for a lack of it or simply omitting the scenario of computer failure. As a non-pilot, I would suspect that blind faith in the computer tends to grow over time to the detriment of safety. Not to worry, soon we non-pilots will get a taste of that medicine since automobiles are being outfitted with similar devices (in the sense of doing stuff which the driver/pilot used to do in the past) to ostensibly reduce “driver errors”. …Well, at least we won’t fall out of the sky…

Actually, IIRC, the problem was not computer failure ! the problem was that the co-pilot (who was in charge of the aircraft at the time) disregarded the computer warnings that the plane was in a “Stall” condition — and finally shut off the nagging stall warning signal. Compounding the problem was that the co-pilot did not have experience with flying at that high altitude and thus did absolutely the wrong thing for a stall condition.

Another complicating factor was human sloppiness which led to inefficient communication. Unfortunately, when the original Captain returned to the cockpit it took too long for him to realize (communication was not precise) that the co-pilot was doing exactly the opposite of what was required to pull out of the stall.

Human fallibility, lack of experience, sloppy communication, and insufficient training are what doomed Flight 447 — not a failure of the computer system.

You’re absolutely right about it *not* being computer error, but the human error was even worse (more easily avoidable) than what you describe. The co-pilot was operating the joystick without telling the pilot (standard cockpit protocol is for someone to say out loud when they take the controls) and he was doing the worst possible thing – trying to climb when his airspeed was too low and they were not near the ground. Even as a non-pilot I know you don’t do that.

Ironically if the co-pilot and the guy in the pilot’s seat had just let go of the controls they probably would have been fine. Although the computer couldn’t get a good airspeed reading, in such situations its fallback is to set the throttles and control surfaces to a state where the plane will almost always just keep on cruising.

Admittedly the human error was exacerbated by poor design of the Airbus. They use sidestick controllers (which pilots find convenient under ordinary circumstances) while Boeing still uses a yoke (wheel) where the pilot’s and copilot’s controls are mechanically linked together. Hence it’s impossible for one guy to operate the controls without the other guy noticing. On the Airbus though if both pilot and copilot try to operate the controls, the computer averages their inputs. If the pilot tries to dive and the copilot tries to climb, the plane will stay level. Hmmm … wouldn’t it be better to at least sound an alarm that the pilot and copilot are trying to both control the plane at the same time?

Perhaps not a computer problem, but definitely a problem with the instruments (as the link in my first comment makes clear):The final report was released at a news conference on 5 July 2012.[14][15] It states that the accident resulted from a succession of events: temporary inconsistency between the airspeed measurements, probably following obstruction of the pitot tubes by ice crystals, that caused the autopilot to disconnect; inappropriate control inputs that destabilized the flight path and led to a stall; and pilot misunderstanding of the situation leading to a lack of control inputs that would have made it possible to recover from it.[1]

Furthermore, there were other incidents reported:There have been several cases where inaccurate airspeed information led to flight incidents on the A330 and A340. Two of those incidents involved pitot probes.[Note 7] In the first incident, an Air France A340-300 (F-GLZL), en route from Tokyo, Japan, to Paris, France, experienced an event at 31,000 feet (9,400 m) in which the airspeed was incorrectly reported and the autopilot automatically disengaged. Bad weather, together with obstructed drainage holes in all three pitot probes, were subsequently found to be the cause.[210] In the second incident, an Air France A340-300 (F-GLZN), en route from Paris to New York, encountered turbulence followed by the autoflight systems going offline, warnings over the accuracy of the reported airspeed and two minutes of stall alerts.[210]

Errors cascade. The first error was input of incorrect settings for the plane’s radar by one of the pilots. Without working radar, Flight 447 flew right into the middle of a high altitude equatorial thunderstorm. The experienced pilot was resting in the back of the plane; no doubt, because in the 21st Century nobody expects a passenger airplane to fly directly into a thunderstorm. The new co-pilot at the controls freaked out. All souls on the plane died.

Last year, was the safest in American airline history according to the media. Yet, flying is intolerable. The passengers are searched, scanned and herded like sheep, all part of the GWOT. Airlines increase hidden fees instead of raising airfares which are taxed. Aircraft overhauls are outsourced to low wage nations. Boeing spent billions to open a second 787 assembly line in South Carolina to pressure union employees in Washington State. Japan’s airlines have grounded their new 787s due to electrical fires. The 787 is the first global airplane with parts designed and outsourced overseas and only assembled in the USA.

The contagion that hit Wall Street which boils down to; “Greed is good. Government is evil” has spread across the globe and infected multi-national corporations even those not directly associated with finance. The coming austerity and recession will only aggravate continued decline of customer service from United Airlines through Comcast to Pepco electric service. In this neo-Gilded Era, avoiding haircuts of bad private debt and ending the Age of Enlightenment are the priorities of the Elites right after deregulation.

The fact that Jon Corzine has not been indicted for stealing a billion dollars from American Farmers is proof that our government has been seized by the 21st Century Crony Capitalists.

In a July 2011 article in Aviation Week, C. B. “Sully” Sullenberger was quoted as saying the crash was a “seminal accident. We need to look at it from a systems approach, a human/technology system that has to work together. This involves aircraft design and certification, training and human factors. If you look at the human factors alone, then you’re missing half or two-thirds of the total system failure…” Sullenberger suggested that pilots would be able to better handle upsets of this type if they had an indication of the wing’s angle of attack (AoA). “We have to infer angle of attack indirectly by referencing speed. That makes stall recognition and recovery that much more difficult. For more than half a century, we’ve had the capability to display AoA (in the cockpits of most jet transports), one of the most critical parameters, yet we choose not to do it.”[214] The BEA recommended that EASA and the FAA should consider making it compulsory for passenger aircraft to be equipped with an angle of attack display.[215]

But to look at it from a different point of view: A330 has been in commercial service since 1994, and Flight 447 was the first fatal accident caused by systems failure. There has only been another one since, in Libya, but its causes have not been established. Given that over 900 have been manufactured and flown uncounted millions of hours, this seems to me a stellar reliability record.

In my opinion, modern aircraft are actually the best example of reliable complex systems, and this reliability stems from their redundancy, i.e. “inefficiency”, which is sorely lacking from most other systems we build.

The paper check, a 19th century technology already abandoned in most of the world, lives on in the pokey U.S. Ditto for ‘wire transfers’ and ‘wire rooms,’ relics of the telegraph era which would be totally unnecessary for domestic transfers if a seamless electronic transfer system were available.

ACH (Automated Clearing House) is clunky because it requires prior authorization from the receiver. You can just mail a check to a relative as a birthday gift, but you can’t send an ACH transfer without their advance cooperation.

Unsurprisingly, the Federal Reserve handles check processing, ACH and wire transfers. The braindead bankster cartel ‘updates’ obsolete technologies such as paper checks with ‘innovations’ as check imaging, rather than rethinking a broken legacy system such as wire transfers, whose failure rate is disgraceful.

If banks ever are to innovate, Job #1 is to disband their troglodyte cartel, the Federal Reserve. Eliminate its antitrust exemption and smash this monster.

Devolution is I think a necessary consequence of looting. The cheapest solution is taken to be the most efficient, but often it ends up being neither cheap nor a solution. Customers become angry and frustrated and will stop buying or working with the offending corp, if they can. Sometimes, they can’t do without or find an alternative that’s any better. So they are screwed.

I think the whole notion of efficiency nowadays is to get fewer workers to do more less well for less pay. I wonder if anyone can come up with an example of a business of any size which treats its workers and customers well, and is well run. I can’t think of any.

It takes a certain degree of knowledge about a business to make it run well. But I think most businesses don’t want to keep workers with that kind of knowledge because they are deemed too expensive. The result is a lot of cheaper, less experienced and trained workers who have only limited ideas about what is going on.

You can also see how this knowledge is eliminated from a business by the increasingly common practice of subcontracting various components like payroll, billing, customer service, manufacturing, etc. to different companies often not even in the same state or country. If these activities were kept in-house, the lines of communication are shorter, the people often know each from having dealt with various issues in the past, and the problems get identified and resolved faster and more effectively. But I suspect this is so not the MBA way of doing things.

Another aspect of having knowledge of a business I would like to mention is leadership. Without people who have knowledge of a business, who care about their fellow workers, and are committed to seeing the business run well you end up with autocrats, not leaders.

I guess what I am getting at with these meanderings is that the human element is what can take a poor business and turn it into an adequate one, and take a good business and turn it into a great one. And it precisely this human element which corporate culture is determined to eliminate from itself.

Yves hints at one aspect of Capitalist looting in this post, but doesn’t mention it explicitly.

Work is not only being outsourced to contractors, it is being offloaded onto customers. From having to bus your own table at the fast food joint to ringing up your own purchases at the Home Depot to having to figure out your bank’s screwed up processes so you can straigthen things out for them, Capitalists are creating “efficiencies” by making us do the work.

Personally, if I’m going to be required to check myself out of Home Depot, I want to be paid for it, and benefits would be nice while you’re at it.

What is the threshhold size at which a bussiness treating its employees and customers well is “important”? If we know how big “any size” is, we can perhaps come up with examples . . . if any examples exist.

Meanwhile, there are degrees between more well and less well. I have read that Costco treats its employees more well than Walmart does. I don’t know if it treats them well
“enough” or not, but I have read it treats them more well than Walmart does.

Zingerman’s Delicatessen family of bussinesses is considered to treat its employees well, but it may be too small a bussiness to “matter”.

Bingo. As I read this, I kept thinking of the current corporate model of education: taking the money and running but leaving teachers with less experience,control and knowledge and parents with lots of bad choices (unless they are very affluent parents). Education “reform” is a perfect example of what you are talking about.

Yet he [Tainter] refused to give social factors any explanatory power in his theory (like, say, rising levels of corruption among the ruling classes).

For a theory of history that is still cyclical, that speaks of the rise and fall of societies, but gives prominence to moral disentigration and decadence, there’s Peter Turchin’s War and Peace and War.

Of course Modernism is not built on a cyclical theory of hitory, but a linear theory of history, where things are always “progressing.” For an explanation of the historical theory that underpins Modernism, see John Gray’s Al Qaeda and What it Means to Be Modern.

I think it is even worse than you suggest. Today’s large corporations are geared solely to maximization of CEO extractions. There is no other objective. Cost minimization only hurts and disappoints customers, while the company’s pricing never declines, only increases, with any plausible excuse. It has become increasingly difficult to accomplish anything when dealing as a customer of a large company. Not only are the physical products increasingly degraded, often worthless, but customer service is an oxymoron. Staff has been dumbed down, minimum waged, stressed out, offshored, in large measure simply doesn’t care. Any screwup evokes the maddening corporate apology- “sorry for your inconvenience”. Absolutely nothing is more infuriating.

In a nutshell, you are simply describing another aspect of the rent extraction and looting economy.

two points. Firstly, I’ll repeat my favourite cheetah/hyena metaphor. Higly efficient – fastest animal on earth. At the same time though, extremely fragile – die if they don’t eat every couple of days, and thus can’t afford any injuries say from protecting they catch against hyenas. Cheetah is sexy, hyena’s not, but overall hyanas perform much better.

Secondly, the problem with the (efficiencies or lack of) of systems as you describe is that it’s often easier – and sometimes the only possible way – to build systems incrementally – and all successull systems stay around (and evolve) for very long time. Unfortunately, that means what made sense 20 years ago, may not make sense anymore but hardly anyone noticed. So the UK has BACS payment system, which was primarily designed to clear cheques (and worked well with that), and was a real dog to operate with electronic payments. As I understand it, US electronic payment systems was pretty much non-existant until recently, which is why PayPal could even exist (having experience from New Zealand, where I could pay online for next-business-day settlement in 1998 I was flabbergasted when I heard about it).

Iterative/step-by-step evolution is fine, until it isn’t, when it tends to break big way. That is the case not only with IT systems, but with any complex systems – basically the evolutionary system keeps the old baggage even if it’s irrelevant or at worse detrimental the new situation since it’s too costly to get it removed (or no-one really understands it, so everyone is afraid to touch it). Revolutions/green field are the solutions, but those are scary and costly (and more often than not they don’t work and even more often kill the initiators even if successful).

BTW, on the “it was better before” – of course, since the volumes were much smaller, and since systems were manual, everyone KNEW mistakes would be made, allowed for it and dealt with them. With computer on the other hand, we have some weird belief that computer is right, and take the numbers as given. Of course, computer is always right in doing exactly what we tell it – but more often than not we tell it something else than we thought we did. Computer rules are hard (literally), and thus less left to interpretation and exception handling than when humans intervene. People who entirely live by hard rules and unable to be flexible are generally thought to have a mental problem – yet we want the same from the systems we design (not only IT ones…)

There’s also the fact that there’s an unquantifiable level of highly questionable accounting practices incarnated in proprietary corporate accounting software out there, thereby rendering those practices/software inscrutable to the rest of us — and sometimes even to the corporate types who read out the end results.

A lot of the failure rate that Yves is talking about in her post is simply a result of that.

Account Number, Banking Number and TAN list, transfer from any bank account to any other bank account, for free … within Europe, or even to Africa for that matter … no idea why this is so difficult for the US, but I guess it has something to do with the fact their is no real central authority over the banking industry

For further insight into the interplay between efficiency & robustness, but in physical and organizational (non-financial) contexts, I’d suggest Scott D. Sagan’s “The Limits of Safety,” and Charles Perrow’s “Normal Accidents.” They nicely frame the conflict between High-Reliability Theory and Normal Accident Theory, which appears to be essentially what we’re playing out here.

I had to write my signature on a touch pad recently. I don’t remember what it was for–I’m pretty sure it was a step above a simple cc transaction, but don’t remember.

My signature turned out like you’d expect, low resolution and crude from a poor stylus angle and size. I clicked “done” and the machine magically cleaned it up! The rough cursive I’d put down was smoothed into something more pleasant to look at. What exactly is the purpose here? Why bother to sign?

Apply a Schwab 1% back Visa. Shortly after receiving it, they report they are discontinuing it, BoA is taking it over. Hello bait and switch. Fast forward a year or two later, BoA sends me a new card. I activate it. Next time I go to online banking, it’s dead, Jim. I have to reapply for online access with the new number. The old statements are available in PDF., but anything I haven’t downloaded, forget it, no electronic download to Quicken. Imbeciles.

Great piece. I feel like I see these phenomena everywhere: You start with an actual problem that needs solving. You translate the problem into a mathematical representation that everyone understands fails to capture important features of the problem. You develop information processing techniques for solving the mathematical representation of the original problem. The techniques help initially, by providing additional knowledge that can then be brought to bear on the original problem.

But before long, people start to think that the mathematical representation of the original problem is the key problem itself, and they forget about all the lost information. So the incentives and capacities that are brought to bear on the problem become distorted and perverted.

Marx talked about the alienation of the worker in an enterprise from the output of the enterprise. But that happens in the corporate hierarchy of managerial, directorial and executive work as well. People higher up in the hierarchy have jobs that consist in “How do I make these numbers on this spreadsheet go in a particular direction?” Their solution is to order the people below them to make numbers on their spreadsheets go in a particular direction. Meanwhile the most important decisions about the most fundamental processes in the enterprise are made in an impulsive, half-assed, thoughtless manner responding only to immediate-term pressures.

Also, no matter how bad the business world can be, so long as it is held together by a certain number of long-term human relationships that involve routine human conversations then the constant temptation to screw people is damped-down somewhat, and the natural human responses to other human beings as human beings play a role. Once those relationships are gone, and relations of person to person are intermediated by multiple layers of technology, the treatment of human beings as mere symbolic tools represented by numbers and accounting entries, requiring no special moral consideration, takes over.

I’ve been amazed by how much this kind of debasement has influenced even the charitable world. Charitable organizations that call me or send me solicitations now routinely use the most repulsive techniques, techniques that even most sales people I have worked with in business would be ashamed to employ. It’s almost as though the charities believe that the goodness of their cause entitles them to extra shameless levels of dishonesty, manipulation and aggression.

Dan – your first two paragraphs are a restatement of Whitehead’s Fallacy of Misplaced Concreteness …

Once you understand its universality you look at a lot of “systems” differently – of course one tends to not want to consider it as it punches a rather large hole, ISTM, in our whole computer culture … based as it is on mathematical models of everything – to stuff something into a computer means, ipso facto, leaving something out, and those “insignificant somethings” seem to have a nasty habit of biting us in the backside …

So when they do, instead of admitting, with chagrin, they where there swimming around all along and should have been attended to, we call them “Black Swans” and claim they flew in from a great Unknown ….. ha,ha,ha …

Thanks – I didn’t know it had such a fancy name. I was going to point out that you can avoid the problem of confusing the abstract and the concrete just by regularly testing the concrete results. Engineers do it all the time. There’s loads of abstract and computer based modeling in engineering (much of our current technology would be impossible without it) but any half-decent engineer will tell you that the acid test is how the concrete implementation works. Gosh Finley, it looks good on paper but let’s see it work.

Old engineering maxim: many a good theory fails to survive contact with reality.

Ironically, the world becomes increasingly fragile even as it builds the most reliable systems ever. Modern airliners, for example, are extremely reliable precisely because they have a lot of redundancy. Even the recent issues with 787 only illustrate that it was robust enough to withstand the failure of invididual subsystems without a catastrophic accident.

I have a hunch that, sadly, in the past the drive towards “efficiency” was resolved by war. Operations research made a huge difference in WW2, and it was then applied to civillian use after the war. But it seems that while our financial systems (and beyond) have very well-researched and tested components, the scientific method is not applied to them in their entirety, which I understand is the point that Richard Bookstaber makes.

As an aside, there was a discussion the other day on BBC on whether handwriting was any use anymore. Surprisingly many commenters took the view that kids do not have to be taught writing. That was on the heels of Hurricane Sandy and massive power cuts!

Modern airliners are also reliable because there have been enough accidents. You need to have enough failures to guide you as systems evolve. The problem with some complex systems – eg, nuclear plants, space shuttles, … – is that you don’t have enough failures and have to rely on assumptions and extrapolations.

Chernobyl is entirely a man-made disaster, and it’s also entirely caused by the culture. Flaws of the RBMK reactor had been known for over 10 years before the night of April 26, 1986. There had been several incidents at Leningrad (partial meltdown in 1975), Ignalina, and Chernobyl itself in 1984, caused by the same defects that triggered the disaster of 1986. The constructors actively suppressed any mention of design flaws even as remedial measures were being scheduled – sadly, too late to prevent Chernobyl.

In the case of Fukushima, it seems the biggest error was placing the reactor in a tsunami-prone area, and that also dates back to 1960s/70s.

First reaction: everyone has rose-colored glasses. We go to an antique store and marvel how everything used to be better. More durable and more detail. Music was better back in my day. Etc. etc.

We forget Sturgeon’s Law: 90% of everything is crud.

All the cheap and poorly-made stuff is thrown away, and doesn’t end up in antique stores. People forget one-hit wonders in music, and some of the geniuses in music today won’t even be appreciated until after they are in Club 27.

Second reaction: There are some obvious signs of cultural decay. Look at the 787 — I don’t know if I’ll ever set foot in one of those. It’s normal for new planes to have teething problems, but it should be getting better with computer design and simulation, not worse. The piece highlighted here on NC about how every piece of it was sub-contracted out and nothing fit right show how the “I’m an MBA and I don’t need to understand what my company does” attitude is rotting out institutions.

Conclusion: The country is ripe for change, and I think the people at the bottom of the social pyramid have the character and the intellectual fortitude to change things — something I might not have thought in the shopaholic 2000’s (the financial crisis was good for something, I suppose).

Those of us at the bottom have the advantage of facing reality on a daily basis. We need to replace the middle and upper management of our rotten institutions, or side-step them. E.g., it’s time for some snubbed Boeing engineers to start their own aviation business, the tricky part being the State Department and their going to bat for Boeing on everything everywhere.

I disagree about the 787. They obviously screwed up the development process and paid the price, but the design was still sound enough to avoid a catastrophic failure (so far). The first jets literally had their wings fall off in mid-air. Doesn’t look to me like design has decayed since.

As for durability, one factor here is that devices used to to be repairable. Nowadays you’re more likely to replace a device than repair it, with consumerism playing its part. So, yes, newer devices are not necessarily less reliable, they are just thrown away rather than repaired.

I agree that the cultural rot is responsible for the production delays, Boeing admitted as much. I’m less certain about the link between cultural decay and 787’s recent issues. It’s possible, but there needs to be more evidence to prove it. A380 also had teething issues, but they weren’t blamed on culture as far as I recall. What is between the two is overpromising/underdelivering, absolutely.

I mean, you’ve got to argue that in 1950/60s the culture was all-right even though planes disintegrated on a regular basis, while the culture is rotten now even though the planes on the whole are far more reliable. Chernobyl disaster is entirely attributable to culture rot, and that dates back do 60s/70s.

They did? The 707’s, 727’s and 737’s of the 1960’s were not known for regularly falling out of the sky. Even the old Connie’s of the 1950’s were pretty solid, even if those piston engines were a pain to maintain.

The Comet, as well as a number of Soviet planes of that era, did literally disintegrate in mid-air. Other early jets, including all those you mention, were still much less reliable than today.

Obviously this is largely learning from experience, but my point is simply that we the people still know how to build reliable systems. It’s just that we don’t practice it outside certain areas such as aircraft manufacturing.

It’s my understanding that Boeing is going through a painful learning curve of changing from a vertically integrated aircraft manufacturer to a “virtual” manufacturer or systems integrator that designs planes, has others manufacture the parts, coordinates the whole with advanced IT, and then puts the parts together. The problem is when the parts don’t fit properly.

Yeah, I have no intention to defend Boeing whom I hate because of their stance on unions, outsourcing, and government contracts. But they still do an incomparably better job of building complex and reliable systems than Wall Street wiz kids who plunder the world while Boeing, for all its faults, moves it ahead.

As their systems integrator role, I thought they swore “never again” on outsourcing detailed design.

As far as your first reaction: I can’t think of how many times I have seen a product that I bought a long time ago (and still have) still being sold – only its not the same. In the process of ‘optimizing’ production, metal and wood have become plastic and the quality has gone down.

Your observation comports with what I said. We keep the well-made things, discard the poorly-made things, then marvel how everything used to be better.

And I would say that your observation is an example of company-wide rot, if not perhaps country-wide or global rot. E.g., Sony used to make quality TVs. Now, they are middling at best. It doesn’t mean no one else makes quality TVs, Sony has become sclerotic and others have picked up the baton.

One thing that interests me is the diametric opposite of what we’ve been discussing. I call the opposite of this process of maturation and decay Toyotafication. If you’ve never heard of it, it’s okay, I just made it up. I use it to mean the process by which a company improves itself so successfully that it paints itself into a corner. Toyota’s process of continuous improvement has yielded mostly defect-free cars. I don’t know whom to believe in the unintended acceleration scandal, but let’s set it aside for the moment. The cars, however, have all the excitement of slow motion growing grass footage and don’t deliver anything like driving nirvana if you enjoy the act of driving. Somehow a company that made the 2000GT, Celica, AE86, MR2, and Supra (sports cars) doesn’t produce a single sports car. Was it the process of continuous improvement that killed the sports car spirit? Something to consider if, like me, you appreciate the idea of improving by learning from your mistakes, but don’t want to lose your spirit.

If I ever have to buy a car, I will want a car which is a reliable transportation and stuff-transport appliance. I will not care if it has “spirit” so long as it meets whatever transportation and stuff-transport needs I may have if I ever become forced by circumstances to have to buy a car.

I’ve thought a lot about this in the context of the horror show of mortgage servicing.

Once upon a time, local banks made loans. Monthly payments were processed by human bank employees, who dutifully entered the payments by hand onto the loan ledger, calculated the interest and principal, and apportioned money to any fees dictated by the terms of the mortgage. Since the bank operated under the laws of one state, and the mortgage instruments were largely uniform, the process was straightforward. If the mortgage moved into foreclosure, the attorneys representing the bank could easily double check the loan ledger for accuracy before making demand for monies due. Failure to do so rendered the foreclosure voidable.

Fast forward to a world in which loan origination and loan servicing are not only severed from each other, but are spread across loans from 50 states and a wide array of loan types. It would not be all that difficult to write software to accurately process mortgage payments in such a world. It wouldn’t even be all that difficult to keep the software updated for changes in state laws, mortgage terms, and loan types. But it would require an ongoing commitment and training of staff.

Even so, I’ve often wondered what goes on inside the legal foreclosure mills these days. Even if the loan payment accounting has been hopelessly screwed up by bad software and inept staff inside the servicers, it can’t be all that difficult to reconstruct how things should have been done. All you need is a copy of the note, a copy of the mortgage instrument, and a record of payments. No competent attorney should even consider proceeding with a foreclosure without double checking this most basic of information.

That devolution seems to have been designed to foster a process of rolling ripoff. If it was indeed designed to foster rolling ripoff, then it is a very high quality sector
if we admit to what its real secret goals, agendas, and purposes really are. If the purpose of the modern lending and mortgage servicing system is to loot, cheat, steal, and make retribution difficult; then the current system is admirably fit for purpose, is it not? If so, can one even call it “devolution”?

Back to the adenosine triphosphate explanation. The efficiency of banking goes to the heart of the social system. I’ve been thinking that Geithner and Bernanke refuse to let the tbtf banks go down because they are critical infrastructure. But they are catastrophically inefficient. Not only do they monopolize the essential nutrient which breathes life into the economy – money – they do it in such a complex fashion they are imploding the system. Complexity is not efficiency. Only diversity, in an ecological sense, is efficient. And it is interesting to note that a healthy ecosystem does not produce anything that could be recognized as a “profit” – everything is used up and nothing is left over. So when anybody says that social complexity requires a higher energy input to achieve efficiency it’s a fundamental truth, it gets all confused because people confuse complexity with diversity. But diversity is far more subtle and should be thought of as an even higher level of complexity. Which could be good.

Confusing the evolved complexity of organisms and ecosystems with the back-of-the-envelope complexity of a recently invented business structure is a problem.

The organic complexity would not exist and would not be so admirably robust without the eons of natural selection that weeded out the early equivalents of our political, social and economic systems. We need awhile longer to work on these.

Tom – ISTM what we need to do is at least copy those systems instead of pretending that we can “improve” on them, e.g. GMOs. A bit of humility in the face of those 4 billion years of “trial and error” would STM to be a good idea …

And, though I am not so sure I would agree that nature produces no “profit” (methinks the energy folks use to create “useless” things like art and fiction and stuff like that might be thought of as “profit” …), I would say that she produces no waste – everything is used for something else when it is through being used by something else …

It’s been interesting working from J.K.Galbraith’s _The New Industrial State_. When that book was written, American industry concentrated on production, including product quality. For all its softness, information technology was part of that culture. Afterwards, perhaps because of the news that earth’s resources were limited, the culture changed. The old mantra of “production” got replaced by the new mantra “efficiency”. And efficiency was defined by it’s obvious metric: spending less. The most efficient way to get that kind of efficiency is to neglect things. Things like training, quality assurance, record keeping.

I can’t honestly give examples, cause my bad banking stories are spread pretty randomly from 1970 to the present, and I can’t show a trend.

It’s interesting to think about the difference between air safety regulation and banking regulation. Air safety regulation is structured around minimizing tail risk , bank regulation is structured around “preserving good relations with industry”.

Devolution isn’t due to the pursuit of efficiency — there is nothing remotely efficient about our banking system — but it does seem to be about bad or non-existent regulation resulting in perverse, anti-social incentives.

The real economy needs banking to be an efficient low-cost utility but bank executives want none of that. More complex and inefficient banking services make it easier to siphon off banks’ share of the flow.

“It’s interesting to think about the difference between air safety regulation and banking regulation.”

Airliner crashes and the NTSB studies everything, including what the pilot had for breakfast. Airline and aircraft manufacturer must cooperate to the fullest. Rules, procedures and airplanes are changed as necessary to minimize future risk.

Banks crash and the Fed, Treasury, etc. immediately proclaim that it was due to unforeseeable events, and no bank or banker could possibly be at fault. Trillions are dumped in to prop up failed systems. Anyone seeing a problem with this is branded a naive and irresponsible populist.

Ah yes, fun with checks. I just mailed a check to BofA for a credit card payment. Their automated system misread the clearly written amount on the check, so instead of paying off the monthly balance like always, we were $50 dollars short. Of course this immediately resulted in an interest charge, which caught my eye on the next monthly statement as I swore to God almighty I would never pay these leeches a penny in interest.

So as I sat on hold while customer service fixed this, I though to myself…”When I make a mistake with these people, they charge fees and interest without batting an eye and I have no recourse. But when they make a mistake, it’s an innocent screw up in their system.”

When the representative returned to the line and asked if there was anything else she could help with, I said “Yes. I make $40/hr and you just wasted 15 minutes of my time, so you owe me $10.” She thought I was joking, but after informing her I was serious, they credited my account an additional $10 and I had successfully charged BofA a “fee.”

Ultimately, this is nothing. But as you point out, they constantly increase “efficiency” in the sense that it makes them more money, but does little to benefit the customer. They don’t care if there are more mistakes as long as it doesn’t impact their bottom line. I’m sure the example above happens countless times and 99% of the time the customer has to call to fix the problem. A small fraction of the time the customer probably doesn’t even notice and pays the interest. In either case, BofA gets off free whereas us little people would be charged penalties for such an egregious error.

@KST et al: I’m reading all of these comments related to lousy, costly banking services and it occurs to me that none of you – not one – abandoned the TBTF banks and opted for the Credit Unions!! So cry me river.

Here in the European country where I live we love our “postal accounts”. The USA would do well to implement such a thing. It would save the Postal Service as well as getting people out of those ridiculous TBTFs.

When I worked at a bank in the mid and late 1960s, there were no computers. Everything, including year end reconciliations, was done by hand. I used to spend the New Year holiday pulling savings account reconciliations at the main branch–and we were then the second largest bank in Pennsylvania, it was a two days job. Savings accounts were kept on hand entered ledger cards at the branches. It all worked very well, thank you.

We were extremely well trained and from my point of view at the bottom of the ladder, it was the best run company I’ve ever worked for.

Back in those days, there were far less opportunities for women. Financial institutions had their pick of very bright ladies to staff their back office operations. Their daughters are now pursuing different careers. Devolution. :)

I wonder where risk fits into the robustness vs efficiency matrix. In modern consumer society it seems all risk is no longer accounted for by the social systems directly but is pawned off indirectly into other parts of the social system. When the entire social system fails to account for risk and the social system continues to grow in complexity catastrophic failures can happen in multiple parts of the system as the same thing without any preparations for these failures.

I’m assuming robustness protects against risk but then it seems like a lot of goods produced today are not designed to be robust but designed to be disposable. The disposability of these products also dip again into risk by requiring incredibly efficient supply chains that arrive just as the supplies are required.

That’s the thing that scares me about this all. The system has discounted all risks inherent in the system and despite seeing underperformance continues to try and make further gains by increasing complexity. Complexity is unable to pay for the increases of complexity while risk is assumed to be a non factor.

Failure to account for risk may lead to the environment forcing a reduction in complexity. When the complexity of the system is already insufficient to deal with the mounting problems caused by the last layers of complexity this causes exacerbation of the unsolved problems. This exacerbation increases other risks leading to a positive feedback loop.

Didn’t Einstein say something to the effect that we cannot solve our problems at the same level of thinking we used to create them?

As far as fragility – whoa – ISTM it is rather idiotic to put more and more functions re infrastructure, services, etc in the hands of computers operated through a network that can be hacked and whacked by some adolescent male munching Cheetos in the back of some hovel in Ubangistan …

Yves,
I’ve experienced this twice in the last 6 months. The most recent was a medical bill. My check cleared my bank, but the billing said there was still a balance. Calling the customer service discovered they had ‘cleared’ my check 4 days after it cleared my bank. They had not credited it because it ‘had to be moved from one system to another’ to clear my balance. I asked why I had to call to make that happen, no explanation why other than the same words about moving it around. The other time was a major mortgage company, all sorts of run around there. I believe that there are ‘trip points’ built into these systems to create exceptions and generate additional fees or defaults intentionally. These systems receive your money but ‘lose it’ until you find someone answering a phone and who is incentivized to get it to the right place.

i suspect the majority of these situations are because banks make process decisions that turn out to be faulty. and not always because of technology (after all for almost 50 years banks used mainframes and the way this was decribed it worked back then. since almost no banks have not used computers for this work, since the 1950s. cause they couldnt have kept up with the population). another possibility is that banks (along with others) have sent back office to other countries. and they dont train those folks there much. and they track how many minutes they are on the phone to get efficiency

Story in the local coffee shop of Amex overcharging a cardholder $2000 and then failing to get a refund check properly cut three times.

From The Department of No! They Would Never Do That!

Anybody have any indication that banks treat falsely generated fees as a profit center? Are incentive structures set up to create conditions where false fees happen in a certain percentage of transactions? I can’t imagine it would be hard to program this, especially at the interfaces between hard-to-integrate systems.

Where better to hide these termites than in code and algorithms that the stuffee-customer will never see or know about (though some clever ones are refusing to refrain from educated — and undoubtedly accurate — speculation)?

I’ve been convinced that something like this is operational across wide swaths of “customer-focused” business (FIRE) although based purely on the circumstantial evidence of systemic, recurring, patterns of such failures in dealings with the health insurer, the wireless provider, the cell phone provider, ConEd — but chiefly the health insurer, over and over and over again, for an incalculable total of lost time, sanity, internal balance, dollars spent sending certified mail to bermuda triangle (alleged) mail rooms.

I do sense that all this is a feature (well possibly embedded in software code) and not a bug.

We know for a fact, due to various depositions, that mortgage servicers such as Countrywide deliberately set up their computer systems to charge illegal fees in violation of the mortgage contract.

We know for a fact, due to a guilty plea, that MBNA deliberately pretended not to receive people’s credit card payments in order to charge fees and interest. In the *1990s*.

Nothing has changed. This is standard operating practice for most of the major “financial institutions”.

Smaller banks and credit unions usually don’t pull this shit. International operations sometimes don’t, if their corporate culture comes from a country where this sort of illegal activity gets punished.

Yves, I’m glad you mentioned the names of the banks involved in your “efficiency” examples above. TD is called Toronto Dominion here in Canada. Our banks have changed from being mere depository banks to also doing insurance business and investment business (including derivatives). Besides that, two of the Canadian banks, including TD, have been buying up large numbers of US banks, especially after the crisis. It would seem to me that Canadian banks are becoming “too big to fail” and that is worrisome.

As usual, we here in the North seem to follow you there in the South about 10 years later on.

We cannot afford quality, so we mass-produce lack of it. It is the equality of “we all can afford crap”. The absence of a first tier of high quality maybe just speaks to the (lack of) taste among inbred wealth.

But there is an important flipside: Efficiency also means less employment. We can replace personnel with dysfunctional tape recordings in FU phone mazes, and we can produce crap with automated assembly lines while quality work requires involving people. Hence, not only are we devolving towards crap – which, pace Kunstler, includes the communities and infrastructure we create for ourselves – but we are dismissing increasingly large percentages of ourselves as potential producers of value. That we also dismiss them as consumers of value, and now even of crap, closes the loop. More and more of us can afford less and less, even as stuff gets crappier and crappier.

Society might well advance to a different level if we produced better, which requires more time and more manual labor, which as a society we would have to pay for. Instead we organize ourselves so that 99% of us cannot afford quality, and the 1% of 2nd+ generation inherited wealth does not understand it. The endowment sponsorship of inbred wealth does not have checks and balances that give rise to great works inspired by a society consensus that great works are necessary and worth the cost. Feudal systems produced a first tier of art, but had not second tier of “crap for everyone”. Whatever we have now is different, but no less unsatisfactory.

There is still non-crap made here and there and available for sale. High quality items at a justly and fairly high price. People who do not make enough money to pay a high price for high quality deserve sympathy. People who DO make enough money to pay high price for high quality but still choose to pay a low price for low quality deserve neither sympathy nor a high wage job.

Those people who shopped at Walmart to save money destroyed many jobs at non-Walmart. Let that job destruction extend to the people who chose to shop at Walmart when they could have afforded Smallmart. Let them live on the Walmart wage they inflicted upon others.

Or in the field of food . . . shinola food costs a shinola price. Shit food costs a shit price. Let those who could pay shinola prices for shinola food but will only pay shit prices for food content themselves with the shit food they deserve.

Unfortunately, The quality output component of many industries has been injured over time. I think the financial system has been a contributory.
I have come across errors in the engineering structural plans of buildings being constructed. A long way back, the workers doing the building were capable of seeing the error and setting in motion the fix – no more. Prior to this the drafter on the team would be able to pick-up problems before it got to the builders/workers – no more. It now appears that problems are getting all the way through to completion in greater abundance and severity than a long way back.

The vast turn over in the trades has produced workers not experienced at seeing problems. This turn over exists as well in the design and planning stages. Blueprints today are produced off-shore and instead of direct measurement they use single point measuring – not a good or bad thing except, the people doing the work are low paid and low trained.
The downward pressure that the financial services industry puts on different businesses by taking the profit in interest/debt is amazing. The further grasp to squeeze out the last drops (efficiency) by those same financial folk has hollowed out the embedded knowledge, creativity, productivity (really)and risk discovery in the victim companies. It is financial predation internal and external.
The result of proceduralizing and partitioning work components makes for gears that no longer mesh. Management on-up is looking for the short-term squeeze-out of cash to feed the debt beast vs. the long term viability of product refinement, company and customer need.
Many failures in the built environment can be drawn-back to someone cutting corners to make the numbers. Some of those failures, in the built environment, have come at the cost of human life. Lives could have been saved. However, the lack of experienced people doing the work in an involved way ie: they are intentionally disconnected from the corporations workings and project list. A direct contributor to this, now lacking, embedded knowledge base was the mass exodus of quality people (forced falling wages and throwing people out) driven out by management (on-up) distracted and concentrated on paying the toll too rent seekers. Rent seekers care for nothing but rent. In fact, the pay structure at the top is a proven type of rent extraction. The executive is now only concerned with rent extraction. The customer is harmed as a result and quality metrics fall.

It seems to me that monopoly capitalism is the root cause here. If there were any genuine competition for customers, part of what would attract and keep customers is better customer service. The banks — and most places — don’t have to do that anymore because there are too few choices to actually have a choice on many things — banking, cable, phone, shopping (Home Depot or…?). I have noticed lately that shopkeepers and bank tellers, among other low wage earners on the frontlines of dealing with the public, are overly solicitous and unnaturally friendly. I find it really annoying being asked, “how is my day going?” or “how are you today?” by someone I have zero interest in revealing that much about myself. I usually just sort of semi-smile in their direction and don’t answer. But that’s what passes for customer service these days. Yes, it’s decadence and cancer capitalism. I bank at credit union (although my mortgage is still at Wells Fargo), shop farmer’s markets and local hardware store when I can — but this is not going to change the world. Long live Devo!

KK – I humbly suggest that “monopoly capitalism” couldn’t have gotten as far in this devolution process as it did without our willing consent …. the hook we swallowed was the promise of “choice” baited with the irresistible morsel of “convenience” – once we swallowed it, we were reeled onto the dinner plate to be served up with relish …

For example – the internet being “added to” the phone for business purposes – now you have a wonderful new “choice”, how much more “convenient” …. Except that you don’t, and it ain’t – more and more you can’t use the phone, to reach anybody when the stupid “on-line” service doesn’t work …. The “convenience” of on-line is becoming the necessity of on-line …. i prefer the phone, i prefer real folks – my “choices” haven’t been expanded, they have been limited.

We are being herded into this wonderful new world of crap and frustration – devolution – all in the name of “convenience” and “choice” and the tools used to “deliver” this are forged in the name of “efficiency and “productivity” …

The increase in energy as complexity increases is the inevitable result of the increase of entropy within the system(see information theory). You can’t avoid it, and this is also the reason that we need to expend more and more energy just to keep us in the same place, and yet more to support efforts to increase and support new knowledge. I don’t think that there is a way out of this. Even deliberately retrogressing would require considerable energy input and the resulting society would probably start the process all over again, if for no other reason than to find out what happened. Increase in knowledge and the fruits of increasing knowledge carry an unavoidable cost.

Those bank snarls may be digital snarls as opposed to paper intensive processing, but the very fact of these snarls does not say “efficiency” to me just because they are digital.

I once worked within a large creaky bureaucracy–so completely unlike anything I had ever seen before as to not be believed– where, admittedly, a lot of processing was still done in triplicate.

Nevertheless, whether the administrative processes in this bureaucracy were paper or digital, the problem was that no one communicated to anyone what the proper procedure was, and more importantly–which is what makes this a managerial problem and not just a matter of employee knowledge of the ways of the institution– no one coordinated procedures across offices and divisions and ensured that they actually worked.

It was simply the case that no one in a position of authority at a high enough level in the institution to actually set administrative policy and procedure and enforce it across offices and divisions actually cared enough about the basic functioning of the institution to do so.

So, the end result was a bunch of low level people without such coordinating authority constantly attempting to push the simplest things–like taking money from a person who wanted you to take it!– through a dense fog that was never adequately explained to any of them, and really was a cesspool of constantly multiplying administrative errors. You held your breath every time you had to do something.

I felt that this lack of attention to all things administrative had everything to do with the status of such work, and the disdain with which it was regarded by the managerial powers that be.

Clearly, this sort of thing is unskilled or marginally skilled and even a monkey could do it. What sort of attention could it possibly require from self promoting people who are too good for that anyway? And this attitude is not wrong, from their careerist perspective. People get credit for splashy new initiatives, no one gets credit for ensuring things actually work.

This left a big gaping vacuum in authority right where administrative “efficiency”– and customer service– should be. In this gap, people were reduced to substituting constant apologetics for the delivery of real customer service, while taking the heat for administrative mismanagement.

My mother’s Maytag washer lasted at least twenty years. I replaced it with a second-hand front loader that lasted three years under heavy use. I replaced that with a top loader this year and I was shocked at the devolution of the fittings in even three years: All the metal components were thinner, edges weren’t smoothed, the hoses were smaller and fastened on with cheaper clips, and so on.

On the show room floor, the only machine that looked like it was built the way my mother’s washing machine was built was the the coin-operated model — the one, that is, where you could charge rent. It was actually armored, because apparently otherwise tenants would knock off the coin collector.

* * *

Same deal with plumbing. My newer bathroom uses pex. The older one, when I opened up that ceiling, has incredibly heavy copper pipe which has lasted at least 50 years and will last many more, which the Pex will not. It seems to me that as a society, we are living on that metaphorical copper pipe, and when it goes, it’s all going to go at once, and we will not be able to replace it.

I had exactly the same experience with the Maytag washer I bought in 1984 that I replaced last year with a front loader (my wife insists it is easier on the clothes and saves power).
What I find the most insidious are cases where, at first glance, you are buying the same thing you did 20 years ago, but on closer inspection, you aren’t. I bought a lawn mower last year – the wheels were no longer rubber, but blow-molded plastic, the tubing in the handle assembly is much thinner and so on. It’s like the manufacturers hope you won’t notice.

You’re right, I can’t be. Glad to be wrong! That said, it seems to me that systems of thinnish and petroleum-based piping are bound to end badly. We have centuries of experience with copper! (Adding Pex is code compliant!)

Looks like you’re in the same quandary as me. I’m redoing the bath in my 30 y.o house and for the plumbing changes (just new faucets, etc.) I’ve been using medium wall copper tubing. That’s the same as what’s in there, and I have no problem sweating tubing, so it was a no-brainer. Not sure what I would do if I had more extensive changes though.

Just because it’s plastic doesn’t mean it’s bad. Plastics vary enormously. The right stuff is good for airplanes (the 787’s problems have nothing to do with the “plastic”, and those composites have been used for parts of planes for years).

And while I’ve never experienced it, I have heard of copper failing. I’m not sure what thickness though and how this might be affected by local water chemistry.

According to your link acidic water is the enemy of copper. I also found out where I live has very acidic ground water (our only source). Supposedly the local public water supply adds stuff to raise the pH, but no numbers are given. Here’s hoping! If you use your own well water in an area like mine Pex would seem be be better.

Adding, a better counter-argument might be home electrical wiring. Too lazy for research right now, but my electrician told me that although metal tubing was worse than knob and tube wiring, modern wiring is better than both, and this seems intuitively right to me (never mind whether right in reality) because my electrical system looks kind of like a LAN, which it should!

“metal tubing was worse than knob and tube wiring, modern wiring is better than both”

Knob and tube? I know it worked for DC.

By metal tube do you mean conduit (rigid) or BX (flexible)? I’ve only heard of conduit in commercial/residential buildings, or maybe large apartment building, but not houses. By “modern” do you mean Romex (overall plastic jacket)? It’s the least expensive, but I’ve never heard of any problem with it in houses.

I grew up in a house with rigid iron conduit (it was built to commercial standards in the 20s).

Nothing beats conduit for electrical wiring. Nothing. Why? Because you can replace the wiring inside it without cutting into the walls at all.

However, the wires *in* the conduit — the insulation was huge layers of silk and rubber. The modern plastic insulation is *so* much better that the electricians were able to run about 20 wires in the space which originally held 2-4. Yay for conduit.

I do my laundry at the laundromat. I am not machine expert, but those machines look solid to me. They are a brand that I had never heard of before (Milnor). If they are indeed solid, wellbuilt, and last-for-years; then I am doing my part to keep Milnor in bussiness making good machines by keeping in bussiness a laundromat which uses (and pays to keep fixed) its Milnor machines.

Credit card trasactions no longer require a signature under a certain dollar value. That value changes from store to store.

Bank accounts opened online seem to have a different ‘status’. Opting into “paperless” statements seems to lessen the protections most people expect in a bank account. I don’t have specifics on this.

Paper statements. Never give them up.

Automatic bill pay? You have to be joking. You can’t even get a statement right, and I’m going to let you handle paying yourself?

The check thing is a joke with me. I made a habbit of signing a few “mickey mouse” over a few months. None were returned, or even questioned. I think the “big boys” now handle all check clearing. All they require is a 300 dpi copy of the check. Frank Abagnale, of “catch me if you can” fame said this is a major problem.

I don’t use a debit card for lots of reasons, but I am wondering if it is still impossible for a person to stop payment on a recurring payment? For a while, the only recourse was to close the account, according to my bank. They left the impression that it was above their heads. I left my debit card.

This is all stuff the OCC should be all over. This is exaclty what they are supposed to do.

Peak this, peak that… my favorite is Peak Complexity. Great concept. We are nearing that threshhold.

We’ve of course been saying that for a while. The centre cannot hold. etc. But we seem ot be nearing that peak. Which is when nature kicks in and sends the pile of spinning plates to the floor.

We built this masive spagetti bowl house of cards, which was okay, until the game changes to Jenga. No one knows which piece to remove first.

The thing here from an accouting POV is that it is viewed as cheaper to fix errors when you must rather than prevent them, hold your customers captive and powerless, and then pay out a pound of cure rather than an ounce of prevention. And then focus on evading that pound of cure.

Defer the cost. Short termism again.

Problem is, eventually the premise comes undone. The company is lying to itself, it actually blows more money avoiding doing things right.

This is where I make sure to send price signals. I do not sit down and shut up. I get hold of humans and use up their time. I send letters and follow up for responses. I send something back if it is too cheaply made or not as advertised.

Their model depends on minimizing the cost of fulfilling thier obligations and depnds on my unmotivated powerlessness. I refuse to give that to them.

One of the catalysts for proletarian revolt is that with the division and specialization of labor, the worker starts to become alienated from this work, the effects of his work, his life and his surroundings. This is textbook Marx and many of the problems brought up when discussing efficiency, devolution, etc, can find there roots in this alienation.

I don’t mean to be rude, but I cannot recognize the situation when I look at my banking experience in the Netherlands. Maybe in this case it’s comparable to the problems with Internet Access and mobile networks in the US? That is, a cartel like structure, which doesn’t see any need to offer a high quality product.

Then again, the devolution theme rings true when it comes to other things. The first thing that comes up is something that come around in the links some time ago; fast fashion. By cheapening products/services you more or less bury high(er)-quality products, or so it seems.

However, Marx’s writings on alienation, from the Manuscripts to the Grundrisse and Capital, demonstrate that for him alienation was not merely a state of mind. The roots of the individual psyche were to be located in how society as a whole is organised. As one Marxist described it, ‘The life activity of the alienated individual is qualitatively of a kind. His actions in religion, family affairs, politics and so on, are as distorted and brutalised as his productive activity… There is no sphere of human activity that lies outside these prison walls’.73 Marx’s theory offers us an indispensable method of understanding how the production process shapes the whole of society. There are two areas of activity which are particularly controversial in relation to alienation. This first is the place of intellectual, or mental labour, and creativity in alienated production.

The division of labour described in this article leads to a sharp division between work and creativity. Work is regimented, broken down into separate tasks. The creative elements in each process are dispersed into a million fragments. Labour itself is a commodity and its value is determined by the labour time which went into its creation, for example, the amount spent on training or educating a worker. A highly skilled technician or engineer will therefore be paid more than an unskilled labourer. As Braverman wrote, ‘In this way, a structure is given to all labour process that at its extremes polarises those whose time is infinitely valuable and those whose time is worth almost nothing’.74 However, this does not mean that the intellectual whose time is valuable escapes from the general pattern of alienation. On the contrary, one of the features of modern capitalism is the commercialisation of knowledge.75 The design of a microchip or computer software is just as much the property of the capitalist as a tin of beans or a car. Capitalists enrich themselves through the appropriation of mental labour in the same way as they do through material labour.

This post is a great example of why i come to NC – where the hell else can you see what amounts to an everyday critique of the predominant paradigm that one can relate to, identify with, on many different levels – without the author feeling the need to resort to all kinds of “theory” or citing the “icons” thereof – just on the basis of reflection on everyday experience ….

I send “price signals” too; letters, emails, everything. You are never sure whether they are read or junked, but short and blunt (no nasty stuff), as well as clear will really torque the jumped-up MBA types who are at the bottom of this behavior. They will often read it despite themselves, and driving up their blood pressure is a worthy goal in itself.

My real pet peeve is the grovelling apology (Oh!, we are Soo Sorry for the inconvenience …etc), usually from an impersonal source, but rarely sometimes from a responsible person. If that happens, don’t be shy! Hit ‘em between the eyes!

Very interesting post. Some thoughts:
1. Arts, art theory, history and art techniques are vastly undervalued in this society-the 38 million paid for Van Gogh painting notwithstanding. I am convinced there is much general value to the overall society in these technical areas and yet we ignore them, much to the detriment of our current well being and that of our children. I am convinced learning the art of the fugue would be good for us. I also am a staunch supporter of introducing youngsters, at age one year, to arts an crafts and music making.
2. The value of literature is also not much seen these days. Yet I feel it would do us good to ask ourselves questions like “why were the characters in the Iliad so concerned about pleasing the gods?” Or, explain this line from Shakespeare’s Henry V
“Piece out our imperfections with your thoughts.
Into a thousand parts divide one man,
And make imaginary puissance.”
Lacking imagination in reading we lack imagination in solving the mundane problems of discovering how a wire transfer works.

Vertebrate evolution probably gave us two kidneys for the same reason we have two hands, two eyes, two ears, two arms, two legs, left and right ventricles; mainly bilateral symmetry that goes back to the dawn of multicellular life forms existence-over 500 million years ago. After the feature of bilateralism was set in the fundamental architecture of living things, it could not be pulled out. I’m not certain anything much can be made of the efficiency meme.

Possibly, all I am saying is that another design ‘could’ have worked out also, pure chance brought up bilateralism. Some organisms are not bilateral -prokaryotes- and I would not, if I were you, try to show they, as life forms, exhibit a less ‘efficient’ body system for surviving. Some folks feel it is the prokaryotes that rule the earth. I’ll leave it to you to show why someone – professional bioligists- would say that.

Also I was trying to say that the term efficiency is not a very good criteria to be putting out in a discussion about how organisms survive or fail in the evolutionary scheme of things. The term efficiency, as the post also points out, is pretty slippery, fishy term to judge overall sucess of a design or of a way of life. Efficiency should really only be used in a very narrow, specific way and the parameters of the use should be very precisely defined and surrounded and supported by carefully derivied data that would drive the discussion of how the dynamics of the parameters work and how they are applied to the specific, narrow, small area defined. All I was saying is that is not possible with evolved organisms that have millions of years of ancestry, to speak of mathematical efficiency like there was some MPG or MPY or watts per calorie comparison involved. Organisms survive-for a while at least-millions of years often, when they would be judged perhaps by an observor from Mars, to have been past their prime so to speak. But survive they did, efficient or not. In fact we may be in that boat ourselves.

Also, please try to understand my point about architecture; the design came up in our ancestral line, 500 million years ago. Could an ancestral organisim hypothetically have awoke one day and said ‘From now on, no more bilateralism!?’ It could not have and for reasons that lie inside of a discussion of the evolutionary changes that take place at the genetic level in developmental biology. That genetice code is some of the most highly preserved code in the planet-understandably as most changes in the coding for development are lethal because the whole schematic is destroyed at a basic level.

Again, I am stating that the architectural system of bilateralims ‘worked’ but that working has nothing to do with efficiency. The architecure of bilateralism simply means there is a ‘top’ and a ‘bottom’ to the design and a ‘left’ and a ‘right’ Again, two kidneys came out of the design blueprint for bilateralsim and that blueprint was derived even before kidneys or eyes or ears were a feature of the ancestral organism. One thing that organism did have was bilateral design coded into its development.

This began with a reference to Art History, but devolved into a criticism of financial systems (just kidding). I was hoping for some references to Julian Hirsch and other wildly popular artists, as these individuals appear to be devolving from the corrupting influence of the investor-fueled art world. The love of money kills everything. I think the whole of civilization is devolving, as witnessed in how people treat one another, and other life forms, and the earth itself, so insanely and destructively.

The charming animal photos I see on this site are a reminder that we humans do not “own” the earth. It is obvious we do not have the wisdom to be proper stewards and to preserve all we have that is so wondrous. This rapacious capitalism and endless pursuit of material gratification are destroying the foundation of our existence, and if that kind of self-destructive behavior is not devolution, I don’t know what else to call it.

Tainter’s thesis in “The Collapse of Complex Societies” is that increasing complexity results in a marginal return on resource investment curve that starts with increasing returns for increased investment but leads inevitably to decreasing returns for increased investment. Thus at some point along the downside of the marginal returns curve it makes good economic sense for the society to “collapse” to less complexity where the marginal return curve is rising (this not necessarily “apocalyptic”). The particular conditions in which the process occurs – including the forms and level of complexity achieved by a society – are independent of the process.

Tainter points out that collapse can be triggered by a variety of situations that are mistakenly seen as the cause of collapse; thus the numerous competing theories of societal collapse that have ad hoc relevance to different social situations. But these overlook the underlying marginal returns issue that is the real cause in every case. Thus the circumstances leading to collapse vary considerably, but the process of declining marginal returns on resource investment is ubiquitous.

The current situation of peer polity systems, Tainter points out, collude to strongly inhibit social collapse so that if it occurs it can be expected to happen to all societies together. It may be that the global collapse is already underway as the marginal returns from the capitalist economies seem to be providing significantly reduced returns on significantly larger resource investments, but whether we are experiencing a societal collapse or a transformation to a new economic process of resource investment has yet to be determined. Tainter’s last word on our situation is, “If civilization collapses again, it will be from failure to take advantage of the current reprieve, a reprieve paradoxically both detrimental and essential to our anticipated future.”

Carefully reading what Tainter has to say can be quite helpful in finding the anticipated future.

I’m still surprised that I can’t do something in the US that has been routine in Germay for decades: write a transfer order with the recipient’s bank and acocunt numbers on it, give it to your bank and let them transfer the money from your account to the redcipient’s account. No need for checks being sent, being loist, being paid, etc.

Hello there! I know this is kinda off topic but I was wondering if you knew where I could get a captcha plugin for my comment form? I’m using the same blog platform as yours and I’m having problems finding one? Thanks a lot!|